Activist Investor Nelson Peltz Grew Disney Stake in Q2

The Trian Partners founder, who dropped a proxy fight against the company in February, held 6.42 million shares at the end of the second quarter

Nelson Peltz and guests attends Day 4 of American Express Presents CARBONE Beach
Nelson Peltz (Romain Maurice/Getty Images)

Activist investor Nelson Peltz has increased his stake in the Walt Disney Company after dropping a proxy fight against the entertainment giant earlier this year.

According to a 13F filing with the U.S. Securities and Exchange Commission, Peltz’s firm Trian Partners held 6.42 million Disney shares valued at $573.6 million as of the second quarter of 2023, up from 5.92 million shares in Q1.

A spokesperson for Trian did not immediately return TheWrap’s request for comment.

Peltz and Trian ended the proxy battle against Disney in February after the company announced it would be restructuring its business and launching an effort to reduce costs by approximately $5.5 billion, including $3 billion on the content side and another $2.5 billion in non-content spending. That effort has included layoffs of 7,000 employees and content write-offs.

“We made important management changes and efficiency improvement to create a more cost effective, coordinated and streamline approach to our operations. We aggressively reduced costs across the enterprise. And we’re on track to exceed our initial goal of $5.5 billion in savings,” Disney CEO Iger told analysts on the Disney’s third quarter earnings call last week. “I’m pleased with how much we’ve gotten done in such a short period of time, but I also know we have a lot more to do.”

Iger, who return to the company in November and has extended his contract through 2026, recently suggested that he would be open to a sale of the company’s linear networks like ABC, Freeform, National Geographic and FX, noting in a July interview with CNBC that they “may not be core” to the company. He also said that the company was on the hunt and has already had “some conversations” with potential strategic partners that could help take ESPN fully direct to consumer.

Iger recently brought in former Disney executives and Candle Media co-CEOs Kevin Mayer and Tom Staggs to consult on the company’s streaming strategy and linear TV business, with the pair set to work with ESPN chairman Jimmy Pitaro to analyze and develop strategic options for the sports network.

In its latest quarter, Disney’s direct-to-consumer division saw revenue increase 9% year over year to $5.5 billion and its operating loss narrow to $512 million from $1.1 billion a year ago.

Disney+ reported a total of 146.1 million subscribers for the quarter, a decrease of 11.7 million from 157.8 million in the previous quarter. The figure included 105.7 million core subscribers, including 46 million in the U.S. and Canada, a decrease of 300,00o from the previous quarter, and 59.7 million international subscribers (excluding Disney+ Hotstar), an increase of 1.1 million.

Disney+ Hotstar subscribers fell to 40.4 million from 52.9 million in the previous quarter, a decrease of 12.5 million. The Wall Street Journal reported that Disney is also considering a sale or joint venture for its digital and TV business in India, which includes Hotstar and Star India.

In the fiscal fourth quarter, Disney expects a rebound in core Disney+ net adds with growth both domestically and internationally. It also anticipates that DTC ad revenue will continue to benefit from higher advertiser demand at Hulu as well as from the ramp-up of the Disney+ ad tier. Additionally, the company expects the content sales, licensing and other segment to generate operating losses up to $100 million worse than the fourth quarter of 2022.

Looking ahead, Iger said that the film studios, parks and streaming businesses would “drive the greatest growth in value creation over the next five years.”

During the earnings call, he announced plans to reduce both the quantity and cost of upcoming motion pictures. He also said that Disney would cut its content budget for fiscal 2023 by $3 billion to approximately $27 billion in total spending, in part due to the SAG-AFTRA and Writers’ Guild of America strikes. Additionally, The company is also “actively exploring” ways to crack down on password sharing and plans to “roll out tactics to drive monetization sometime in 2024.”

Shares of Disney closed at $87.06 at the end of Tuesday’s trading session, down 2% year to date.